The Business Recovery Procedure in Chambers of Commerce (PRE) is perhaps the most versatile recovery tool available in the Colombian legal system. It is a figure inspired by international insolvency standards for micro and small companies, but with a unique configuration that allows the interaction of all dispute resolution mechanisms: mediation, conciliation, arbitration, amicable composition, and judicial intervention.

This procedure is provided for in Article 7 of Law 2437 of 2024, which substantially took over Article 9 of Decree 560 of 2020 and, as in the superseded rule, defended its effectiveness to the issuance of two additional instruments: (i) a regulation for the chambers of commerce, which must be adopted by Confecámaras and approved by the Superintendency of Companies, and (ii) a regulatory decree that develops the expedited judicial validation of the recovery agreement. Neither of the two have been issued as of the date of publication of this entry.

In force Decree 560 of 2020, this figure was developed by Decree 842 of the same year regarding: the subjects of the procedure (art. 3); the publicity of the admission to the procedure (art. 6); the voting of the agreement and its effects (art. 7); the expeditious judicial validation of the agreement (art. 11); and the applicability of arbitration and other alternative dispute resolution mechanisms (arts. 12 and 13). It is to be expected that this regulation will be taken up again in the new normative instrument to be issued.

The regulations for the chambers of commerce that were approved at the time were responsible for regulating the mediator (composition of the list, powers, duties, termination, etc.); the actual mediation process; the work of the mediator in the event of judicial validation; arbitration and the fees applicable to the mechanism. As in the previous case, it is expected that the new regulations will substantially reflect the provisions of the regulations in force during the sanitary emergency and its extensions.

The PRE is a totally non-judicialized procedure, without prejudice to the possibility of validating the agreement reached before the competent judge, and it allows both the subjects that can be subject to its procedure under Law 1116 of 2006, as well as those expressly excluded from that insolvency statute. This implies a considerable widening of the subjective scope of validity in the sense that all business organizations (regardless of their associative form) that have not been assigned a special recovery procedure by law may opt for this procedure, which could be accessed, for example, by companies in the health sector, public utilities companies and companies in the education industry.

In effect, the repealed Decree 842 of 2020 stated: "They may resort to the corporate recovery procedure provided for in Legislative Decree 560. April 15, 2020, natural persons traders, legal persons excluded and not excluded from the corporate insolvency regime established in Law 1116 of 2006, branches of foreign companies and autonomous patrimonies affected to the performance of business activities, provided that they are not compulsorily subject to a special business recovery regime or do not have a specific recovery regime. The above, without prejudice of the administrative measures of taking possession or intervention to manage or liquidate that may be adopted by the inspection, surveillance and control authorities, in exercise of their legal powers.“.

While the emergency regulations were in force, there was an interesting debate on the existence or non-existence of the business recovery agreement when one or few creditors were able to join the mediation process, far from the majority required for its judicial validation. In at least one case that I knew first hand, the mediator refrained from attesting to the agreement reached with two creditors because, in his opinion, the lack of an approving majority implied its non-existence, thus confusing the out-of-court agreement with the judicial one. In reality the agreement exists even if it is consented to by a single creditor with few votes (relative effect of the contracts), only that it could not be successfully submitted to the judicial validation procedure due to lack of majorities, but that is a totally different matter. One thing is that the agreement exists among those who concurred to it, and another that its effects can be extended to absentees and dissidents if the requirements foreseen for that purpose are met.